When several individuals, as opposed to a single person, run an organization, a decentralized organization structure is within the scope. While in a small business the owner is in charge for the company’s proceedings, a bigger organization demands a team approach to be applied. This is especially true for Johnson & Johnson “overseeing more than 200 operating companies across three sectors, including the consumer products that have made Johnson & Johnson a household name; pharmaceuticals like Tylenol; and medical devices”. This is “our medical device and diagnostics business, which by itself is the largest medical device and diagnostics business in the world” that makes the Company especially proud covering a broad array of products. Therefore, it is evident that special skills and profound knowledge is required for running the business operations. Utilizing individuals trained in specific attainment areas, the company is governed by a broad-based management team, which is ready to accomplish various market challenges.
Johnson & Johnson’s Decentralized Organization
Johnson & Johnson, being a reference of the decentralized enterprise, has possible disadvantages that may be studied and presented for educational purposes. It should be taken for granted that it is much more difficult both to command and to manage in a decentralized mode of administration. For example, any individual having its own personal opinion, in such a company might go through heavy struggles while searching for a solution in need of taking a principal decision. “I think that the downside to decentralization … is actually the coordination” recognizes William Weldon, Chairman and CEO of the New Brunswick-based firm of Johnson & Johnson. For sure, organizations of this kind face inner inconsistencies trying to achieve a common solution. In Johnson & Johnson, there are 200 operating companies, so 200 leaders should be educated properly. It might be also more than difficult to run a remote branch (presumably abroad) from the Central Office as well. A new coming executive must feel the demand for a thorough understanding of all collaboration and is ought to show remarkable flexibility in defending personal view.
A decentralized organization, due to its constitutions, is a place to collect many talented and bright personalities in the right room. While cooperating in a team, they may give birth to remarkable ideas. “A tremendous opportunity to develop people” is where the strong points of a differentiation become well seen. A personal mistake in a centralized organization can lead to a potential disaster, while a decentralized architecture is capable of proper management. Another opportunity to be discussed, is providing an acceptable manner of trade expansion within globalization. As soon as local people will be authorized to make decisions, cultural or historical features of the market will surely be taken into account, for the real needs to be related to the real customer, whoever the customer might be.
There are pluses and minuses to organic and mechanistic structures, and it might be uneasy, if not impossible, to estimate preference decisively. An organic structure will impose to decentralized organizations most, as the team is the primary integrating mechanism, in which employees coordinate tasks, supporting lateral communication in a verbal fashion. The features carry a potential advantage for the company to prevent human factor mistakes more accurately, as cooperation is in respect. On the other hand, interpersonal contacts are uncommonly unpredictable, the fact arising from rule defects. Mechanistic structures, in their turn boast standard operating procedures with an organized network of positions, where each position corresponds to a task. Hierarchy being well-defined, written vertical communication while approaching formal negotiations may supersede simple human relations. Thus, the mechanistic structure will serve for a stable environment, while for a dynamic and changing world organic structures may be congruent. The environmental requirements are pushing on the organic system, where specialists might be under higher professional pressures. This is company’s responsibility to choose the mode of organization adequately, as any structure under certain circumstances and sound balance may become acceptable or unbearable.